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Bitcoin Price Pressure

blog.samaltman.com

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Re: Bitcoin Price Pressure

#111

Post by canvia »

VMG wrote: post #18

> And even if bitcoin itself fails, I think the blockchain will be one of key technical innovations of this time period. A blockchain is only useful if it is heavily secured by hashing power. This is only the case if there is significant mining equipment devoted to validating blocks. That in turn only happens if there is a reward for validating a block. Long story short, it's currently very difficult to use a secure…

If miners had to be registered and were restricted to a certain amount of hashing power per unique registered user, or had to purchase a standard mining rig (maybe one that doubled as a POS, and restrict mining to merchants) in order to participate, I think that would mitigate the risk of a 51% attack. Right now the imbalance in ability to mine not only creates a risk of an attack, but it skews the distribution of newly generated bitcoin. In my opinion those are the two biggest problems with bitcoin and good enough reasons for it to fail in the long run. It would take a new crypto to address those issues since the initial distribution of bitcoin is so imbalanced.

Re: Bitcoin Price Pressure

#112

Post by VLM »

logicallee wrote: post #98

>This doesn’t mean bitcoin is doomed. It just means that for it to succeed, we’ll need significant external buy pressure. As I wrote awhile ago, I think the key thing we need for this is people actually using bitcoin for transactions instead of speculation (and merchants willing to hold bitcoin balances). [3] Unfortunately, transaction volume still appears to be trending down. Let's look at this. Yes, one easy way in…

Where does the base assumption that it has to take over in a decade come from? If you give it a century then its starting to look much less inflationary than holding USD.

You could play a spreadsheet game of finding a length of time to take over such that its always just a little more stable, just a little stronger, than the USD.

Finally another base assumption is that "being a major player" is the only success condition. Would it be an utter failure if instead of becoming as big as the USA economy it never became larger than the Australian economy? Australia isn't all that awful of a place, you know.

Re: Bitcoin Price Pressure

#113

Post by gphilip »

boyaka wrote: post #37
sillysaurus3 wrote: post #33

In a moment of some depression, reflecting back on sinking so much money into Bitcoin at close to the peak of its price history, I made this: http://i.imgur.com/f3tIJwK.png It's important to understand that Bitcoin is dangerous to you, and you need to respect its danger if you decide to buy some. You need to be using a secure cold storage wallet. You need to not trust services like Coinbase to hold onto your coins fo…

Can you provide reasons/evidence for why I should not trust Coinbase?

To add to what sillysaurus3 says, and copying from my comment from an old thread:

As far as I know (IANAL) there is no law or precedent which takes the value of stolen bitcoins into consideration while sentencing. There is also no history (AFAIK) of prosecution, of serious prosecution which takes the effort to follow up on stolen coins may have been "mixed" etc., in cases of BTC theft.

Given this, does not an online service (like Coinbase) which holds a large amount of bitcoin in "stealable" form present, to potential criminals, a lot of incentive to break in and take it all away? I, for one, wouldn't keep up to 5000 USD in such a place, at least till the time there has been some serious prosecution and proportionate sentencing of BTC thieves. But of course to each their own.

Re: Bitcoin Price Pressure

#114

Post by vijayboyapati »

Sam writes: "It just means that for it to succeed, we’ll need significant external buy pressure. As I wrote awhile ago, I think the key thing we need for this is people actually using bitcoin for transactions instead of speculation (and merchants willing to hold bitcoin balances). "

I think this is a very common meme about what success means for bitcoin and it's tied up with a misunderstanding of what money is; most people think money is valuable because it's used transactionally. Rather, money is valuable because it has reservation demand. An increasing level of transactional usage might increase reservation demand but it doesn't need to. On the other hand increasing reservation demand can occur even without any new transactional demand. Moldbug explained this best in his discussions on bitcoin and how money is a bubble phenomenon:

http://unqualified-reservations.blogspot.com/2013/04/bitcoin...

http://unqualified-reservations.blogspot.com/2011/04/on-mone...

Bitcoin can be "successful" even if it's not the preferred medium of exchange for most, or even many transactions. It can act as a store of value just as gold does. Except it is superior to gold is almost every way - more fungible, more verifiable, more divisible, easier to transport (especially across borders) and easier to transmit. A success case for bitcoin is that it becomes Gold 2.0. Gold's market cap is approximately 7 trillion. Bitcoin's market cap is approximately 6 billion. If Bitcoin were to replace gold as an alternatively medium of savings (say, in 50 years), its price could be hundreds or thousands of times higher than it is now without needed much, if any, increase in transactional use. Gold has almost no transactional use but it has a great deal of reservation demand.

Re: Bitcoin Price Pressure

#115

Post by atom-morgan »

IvyMike wrote: post #100
atom-morgan wrote: post #93

Earlier quoted context omitted.

> If someone gets access to your bitcoin wallet or whatever storage mechanism you are using fails, then that money is gone forever with no way to recover it. Keep in mind that you're comparing two different markets in terms of maturity. One day, there may be a number I can call too when my bitcoin goes missing. I'm sure people made similar arguments before e-commerce. Surely it had to seem easier to just buy a produc…

> One day, there may be a number I can call to when my bitcoin goes missing. Genuinely curious--how would this work?

I'm not 100% sure. I'm sure some people are working on this problem right now.

Re: Bitcoin Price Pressure

#116

Post by soup10 »

wil421 wrote: post #103
sillysaurus3 wrote: post #33

In a moment of some depression, reflecting back on sinking so much money into Bitcoin at close to the peak of its price history, I made this: http://i.imgur.com/f3tIJwK.png It's important to understand that Bitcoin is dangerous to you, and you need to respect its danger if you decide to buy some. You need to be using a secure cold storage wallet. You need to not trust services like Coinbase to hold onto your coins fo…

When Bitcoin was at $30 and then dropped to $8 I thought it was a bad buy. At the time I didnt have any money but I am still just enjoying watching the ride.

Lol when bitcoin was at $100 and crashed to as low as $3 at one point I thought that was the end of it. It's proved surprisingly resilient though. I think bitcoin only gains value when it reaches new consumers/markets, and loses value when the hype dies down. After it runs of out of hype it's long term value depends on it's effectiveness as a currency which is dubious(certainly not convincing at this point).

Re: Bitcoin Price Pressure

#117

Post by mhluongo »

In my (admittedly short) experience accepting bitcoin, our customers keep coming back. It's not much data, but we've had 25% retention these 3 weeks.

I think being able to spend bitcoin places people actually visit every day is going to be huge for adoption / stability. How often do I spend at Overstock.com? Now what about the corner coffee shop, or the grocery store?

Re: Bitcoin Price Pressure

#118

Post by a_c_s »

vijayboyapati wrote: post #114

Sam writes: "It just means that for it to succeed, we’ll need significant external buy pressure. As I wrote awhile ago, I think the key thing we need for this is people actually using bitcoin for transactions instead of speculation (and merchants willing to hold bitcoin balances). " I think this is a very common meme about what success means for bitcoin and it's tied up with a misunderstanding of what money is; most…

"...it is superior to gold is almost every way"

Except for the part where you can actually make things with gold: it is shiny, easy to work with and highly conductive. So worst case, if the value of gold plummeted you could still make some awesome jewelry, electronics, dental fillings, etc.

While it may not be proportional to the current price, gold does have intrinsic value: Bitcoin has none.

Re: Bitcoin Price Pressure

#119

Post by battani »

logicallee wrote: post #98

>This doesn’t mean bitcoin is doomed. It just means that for it to succeed, we’ll need significant external buy pressure. As I wrote awhile ago, I think the key thing we need for this is people actually using bitcoin for transactions instead of speculation (and merchants willing to hold bitcoin balances). [3] Unfortunately, transaction volume still appears to be trending down. Let's look at this. Yes, one easy way in…

You raise interesting points, but you make many, many assumptions. It's totally possible that they may all come true, but there is a lot of speculation in your analysis.

Also, you assume that BTCUSD price will rise as bitcoin gains adoption (that is the basis of your analysis). But there is no correlation between price and adoption.

It's not hard to imagine a world where 1 BTC is stable at ~$10K for example. Denominations would be in milli- and micro-BTC, and BTCUSD price would be an afterthought.

Re: Bitcoin Price Pressure

#120

Post by dublinben »

VMG wrote: post #105
dublinben wrote: post #77

Earlier quoted context omitted.

If you actually had enough money to worry about this kind of thing, I doubt you would be using Bitcoin for your assets.

http://reason.com/blog/2014/04/28/doj-operation-chokepoint-a... > Under "Operation Choke Point," the DOJ and its allies are going after legal but subjectively undesirable business ventures by pressuring banks to terminate their bank accounts or refuse their business. The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it's o…

That specific article is spreading FUD and perpetuating a hoax. There's no evidence whatsoever that Ms. Presley's case is related to the DoJ.

>Bitcoin on the other hand doesn't care about these things.

Bitcoin certainly has made itself quite a reputation for being the currency of choice for scammers, hackers, drug dealers, online gamblers, and child pornographers. Merchants who consider accepting BTC might care about those things.

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